Palomar seeks $150m quake cover with Torrey Pines Re 2023-1 cat bond

Palomar Insurance Holdings is back in the catastrophe bond market for its fourth issuance, seeking $150 million or more in US earthquake reinsurance from the capital markets with this Torrey Pines Re Ltd. (Series 2023-1) issuance.

It is the fourth Torrey Pines catastrophe bond from the speciality California-headquartered insurer that provides largely catastrophe exposed property products.

This year the company is seeking both a dedicated source of California focused earthquake cover, as well as a US wide source, across two tranches of Series 2023-1 cat bond notes set to be issued by its Torrey Pines Re Ltd. vehicle.

This new cat bond will cover Palomar Specialty Insurance Company and Palomar Excess and Surplus Insurance Company, we understand.

Torrey Pines Re will issue two tranches of Series 2023-1 notes, that will be sold to investors and the proceeds used to finance reinsurance arrangements for Palomar.

The Torrey Pines Re 2023-1 catastrophe bond will provide Palomar with California specific and US-wide earthquake reinsurance protection, across a three-year term and on an indemnity and per-occurrence basis, we’ve learned.

The first, currently $100 million, Class A tranche of notes will provide California quake cover, from an attachment point of $1.225 billion, running to $1.375 billion, giving them an initial attachment probability of 0.96%, an initial expected loss of 0.90%, and they are offered with price guidance in a range from 5.25% to 5.75%, we understand.

Meanwhile, a currently $50 million Class B tranche of notes will provide US-wide earthquake cover, from an attachment point of $650 million to an exhaustion point of $750 million, giving them an initial attachment probability of 2.56%, an initial expected loss of 2.38%, and these are offered with price guidance in a range from 8.25% to 8.75%.

It’s encouraging to hear that Palomar is continuing to put the catastrophe bond market at the heart of its reinsurance arrangements, growing the capital markets participation in its reinsurance tower, ultimately supporting the insurers growth as well.

You can read all about this Torrey Pines Re Ltd. (Series 2023-1) catastrophe bond and every deal issued since 1996 in the Artemis Deal Directory.